TORONTO - The Toronto stock market erased early losses to close higher Friday as investors bought into beaten-down mining stocks.

The S&P/TSX composite index closed 67.56 points higher at 15,625.73.

The Canadian dollar was down 0.22 of a cent at 91.97 cents US amid data that also showed stronger than expected Canadian economic growth.

Statistics Canada reported gross domestic product ran up at an annual rate of 3.1 per cent in the second quarter, higher than the 2.7 per cent read that economists had expected. First-quarter growth, which was affected by a severe winter, was revised downward to a gain of 0.9 per cent compared with an earlier reading of 1.2 per cent.

On a monthly basis, GDP climbed 0.3 per cent in June versus the 0.2 per cent rise that had been forecast.

U.S. indexes were modestly higher while traders played it cautious going into the long Labour Day weekend amid fears of a wider Russian incursion into Ukraine and a big letdown in U.S. consumer spending data.

The Dow Jones industrials climbed 18.88 points to 17,098.45 as other data showed consumer spending dropped 0.1 per cent last month, against the gain of 0.3 per cent that generally had been expected, with weakness most pronounced in the auto sector.

The Nasdaq ran ahead 22.57 points to 4,580.27 and the S&P 500 index was up 6.63 points to 2,003.37.

Other data showed a sharp uptick in manufacturing activity in the American Midwest. The Chicago Purchasing Managers Index surged to 64.3 in August from 56.5 in July.

Investors watched the Ukraine conflict for signs of further escalation after the countryâ€™s president said that Russian forces had entered the southeastern part of the country, which had largely escaped earlier fighting between Ukraine forces and pro-Russian militias.

European Union foreign ministers met Friday to weigh adopting a tougher stance on the Ukraine crisis amid increasing calls to beef up economic sanctions against Russia.

The tepid market performance Friday also comes at a time when indexes are close to record highs, raising questions about what is needed to push markets even higher.

Toronto and New York markets both gained ground this past week. The Dow industrials posted a 97- points or 0.57 per cent advance, while the TSX gained 90 points or 0.6 per cent, led by consumer staples, industrials and telecoms. But the TSX was held back by the financial sector, down 1.15 per cent this week despite a steady parade of earnings news from the big Canadian banks that largely beat expectations.

Stock prices for the big banks are or near record or 52-week highs as the results started to come out a week ago and the financial sector is still up 11 per cent year to date.

"There was nothing wrong with the earnings reports, they were fine," Cieszynski said.

"But because expectations were running so high, people just used it as an excuse to take profits again. But theyâ€™ll be back."

The financial sector erased early losses to move ahead 0.26 per cent.

Resource sectors provided lift with the gold sector ahead about 1.56 per cent while December gold backed off $3 to US$1,287.40 an ounce.

The energy sector rose 1.07 per cent as October crude in New York gained $1.15 to US$95.70 a barrel.

December copper gained one cent to US$3.16 a pound and the battered base metals component, down six per cent this month, gained 0.3 per cent.

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